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2019MTEF
MEDIUM TERM EXPENDITURE FRAMEWORK
TECHNICAL GUIDELINES
NATIONAL
June 2018This document is available at:
www.treasury.gov.za/publications/guidelines
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CONTENTS
1 INTRODUCTION ...................................................................................................... 1
2 COMPONENTS OF SUBMISSION ........................................................................... 3
3 SEPARATE SUBMISSIONS .................................................................................... 8
3.1 LARGE STRATEGIC INFRASTRUCTURE PROJECTS .......................................... 8
3.2 GENERAL BUDGET SUPPORT FROM DEVELOPMENT COOPERATION
PARTNERS ............................................................................................................. 8
3.3 BUDGET PROGRAMME STRUCTURE CHANGE PROPOSALS ............................ 9
4 2019 MTEF BUDGET PROCESS ........................................................................... 10
4.1 Critical 2019 MTEF National Budget Process dates ............................................... 10
ANNEXURE A: RESOURCE ALLOCATION PROCESS STEPS ................................ 11
ANNEXURE B: BUDGET PROCESS TECHNICAL AND POLITICAL STRUCTURES 13
ANNEXURE C: FUNCTION GROUPS ......................................................................... 16
2019 MTEF Technical Guidelines
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1 INTRODUCTION
1.1 These Guidelines provide public institutions with guidance on how to prepare their medium-
term budget submissions for the 2019 Budget. They are issued in accordance with section
27(3) of the Public Finance Management Act (PFMA), Act No. 1 of 1999. While primarily
intended for national government departments, they may be used to guide the submissions
made by other institutions1 to national government departments.
1.2 The following policy guidance should be taken into account when preparing the budget
submission:
There are NO additional resources available for allocation over the 2019 Medium Term
Expenditure Framework (MTEF) period within the expenditure ceiling set in the 2018
Budget. This means that additional allocations to a programme will need to be funded
by reductions in funding for another programme, either within the department’s budget,
or from another department’s budget. This may involve the scaling down of non-priority
programmes and projects, changing service delivery models, using technology more
effectively etc.
As tasked by Cabinet, the Department of Planning, Monitoring and Evaluation (DPME)
is developing a mandate paper on policy priorities to guide the allocation of reprioritised
resources. This paper will be issued separately by DPME in due course, and will help
to inform deliberations on the budget.
Potentially deteriorating economic circumstances as well as priority programmes
require a scenario where proposals are made for non-priority programmes and projects
to be scaled down or closed.
The 2019 Budget aims to change the composition of spending towards spending that
stimulates economic growth, particularly capital expenditure. Spending on the
compensation of employees has grown substantially over the past few years. This
trend needs to be reversed to ensure that the spending on compensation of employees
does not crowd out spending in critical areas, including on the complementary
resources required by personnel to undertake their tasks in an efficient manner.
Departments must therefore operate within compensation of employees expenditure
ceilings contained in the MTEC submission workbooks, by containing costs and
improving efficiency through the undertaking of appropriate operational changes. Any
adjustments required as the result of the 2018 public sector wage agreement must be
made within institutional compensation of employees expenditure ceilings. Refer to the
Guidelines for the Costing and Budgeting for Compensation of Employees: For the
Preparation of Expenditure Estimates for the 2019 Medium Term Expenditure
1 Public institutions including public entities, trading entities, government components and constitutional institutions need to provide
necessary budget information to national departments to enable them to prepare the budget submission to National Treasury. Constitutional institutions may also approach the National Treasury directly regarding their budget submission.
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Framework (MTEF) for further information. All National Treasury guidelines can be
found at: http://www.treasury.gov.za/publications/guidelines/.
Cost emanating from the increase in Value Added Tax (VAT) must be absorbed within
the baseline.
1.3 The aim of these technical guidelines is to ensure that the documentation prepared by public
institutions provides all the relevant information, on main strategic proposals, required to
prepare clear recommendations in respect of the budget. The Ministers’ Committee on the
Budget Technical Committee (MTEC) – which is composed of Directors-General of several
centre-of-government departments, prepare recommendations for consideration by the
Ministers’ Committee on the Budget (MINCOMBUD) and Cabinet. These recommendations
draw on institutional budget submissions and engagements on these submissions in the
course of the budget process. Further information on these matters can be found in
Annexure B: Budget process technical and political structures. The primary budget
submission of a national department must be:
Submitted by the Accounting Officer and accompanied by a covering letter confirming
that the submission is the expression of the department’s strategic direction, which
results from the budget deliberations of its executive management. Comprised of
three elements:
a) A narrative report which explains the context for the budget and provides the
department’s rationale for expenditure recommendations over the medium term.
The report must be clear and concise aimed at helping decision makers reach
conclusions on the basis of evidence and the evaluation of performance.
b) Data submissions:
National department’s estimates of expenditure by programme and main
economic classification.
A budget data submission for each institution.
Comprehensive, covering all the expenditure proposed for appropriation against a vote,
including transfers to institutions and other spheres of government within the budget
vote.
Based on key performance indicators, in line with Medium Term Strategic Framework,
Strategic Plans and Annual Performance Plans. These indicators must be consistent
with the departments’ significant spending items and priorities. Proposed changes to
the selected indicators must be discussed and agreed to with the Department of
Planning, Monitoring and Evaluation (DPME) and the National Treasury during the
budget process.
Prepared under the guidance of the accounting officer of the national department, in
collaboration with the institutions that report to the same executive authority.
1.4 Budget submissions must be received by the National Treasury by 13 July 2018.
1.5 Separate submissions in respect of the following elements will also be considered in the
2019 budget process:
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Large strategic infrastructure projects
General Budget Support from development cooperation partners
Budget and programme structure changes
The content and deadlines applicable to these separate submissions can be found
on the National Treasury’s website: http://www.treasury.gov.za/publications/guidelines/.
2 COMPONENTS OF SUBMISSION
The budget submission consists of:
a narrative report; and
data submissions for each national government department as well as each institution.
The requirements pertaining to each of these elements are described in the sections that
follow.
2.1 NARRATIVE REPORT
The narrative report must explain the context for the budget and provide an evidence-
based rationale for decision makers to formulate their expenditure recommendations. It
must be a comprehensive report that include the following elements, which are explained
in more detail below:
Key programmes
Composition of spending
Reallocations
Baseline reductions
Value-for-money
Human resources
Cost pressures
Public institutions
Conditional grant change proposals
Key programmes must explain trends, issues and challenges related to the largest
conditional grants, transfers and programmes that relate to the core strategic
priorities of the department. The discussion should link budget analysis with a
consideration of the policy outcomes and performance indicators for each element.
Some significant spending items have been pre-selected by the National Treasury
for discussion in the report, and are also highlighted in the data submission. The
trends in these and other important budget areas must be discussed.
Composition of spending must discuss trends, issues and challenges per economic
classification over the seven year period, i.e. in respect of compensation of
employees, capital spending, goods and services, transfers and subsidies and other
relevant elements of the budget defined by economic classification. The 2019
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Budget aims to change the composition of spending away from compensation of
employees towards capital expenditure.
Reallocations must provide an explanation of the proposals to reallocate spending
between programmes or economic classifications with a view of addressing cost
pressures or better aligning resources with identified priorities. This should include
the justification and rationale for the programmes and projects to be scaled down,
rescheduled to a later period or closed. In the case of strategic realignments to meet
new policy imperatives, the priority must be identified and the solution explained,
together with its budget and performance impact. The budget implications must be
quantified and a rationale must be provided for the source of funding. Internal
reallocations may not be sufficient to address a particular priority, in which case this
would feed into the cost pressures section of the narrative report.
Baseline reductions must provide proposals for programmes and projects to be
scaled down or closed. These proposals must in aggregate, amount to 1.6 per cent
in 2019/20; 1.5 per cent in 2020/21 and 1.4 per cent in 2021/22 of the budget
baseline. The justification and rationale for the selection of the programmes and
projects, must be explained, together with the impact on service delivery, if any.
Value-for-money section must explain the departments’ plans to improve efficiency,
realise savings, contain costs and improve value-for-money, with particular
reference to supply chain management, procurement and strategic sourcing. The
department’s plans to participate in transversal contracts to assist in containing
costs should be specifically addressed. Departments must consult the National
Treasury should they need more information on how to participate in transversal
contracts. Savings realised through the value-for-money plan could feed into the
reallocations section to be reallocated towards priority areas.
The following link may be accessed for the guidelines listed below as well as further
guidance on other OCPO initiatives:
http://ocpo.treasury.gov.za/Buyers_Area/Legislation/Pages/Guidelines.aspx:
o Guide to Tracking Savings and Benefits of Sourcing Strategies;
o Guide to Reduce Procurement Spend - Health, Education, Travel;
o Guide to Reduction in Procurement Spend;
o Implementation Guide - Preferential Procurement Regulations March 2017; and
o Centrally Negotiated Savings Circulars.
Human resources must be a narrative in respect of the information that will be
contained in the human resource budget plan, which forms part of the data
submission. It should explain the departments’ plans and intentions in respect of
establishment restructuring, headcount management, recruitment and human
resource development with a view to operating within its compensation of
employees expenditure ceiling. This requires the inclusion of information on key
changes effected and envisaged on the department’s personnel profile, including the
related department’s personnel expenditure and headcount.
National Treasury’s Guidelines for the Costing and Budgeting for Compensation of
Employees: For the Preparation of Expenditure Estimates for the 2019 Medium
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Term Expenditure Framework (MTEF) must be used when costing compensation of
employees. All National Treasury guidelines can be found at:
http://www.treasury.gov.za/publications/guidelines/.
Cost pressures must provide an explanation of pressures arising in the budget as a
result of changed economic or social conditions, or priority areas that could not be
funded through reallocation. Where possible these pressures should be costed, and
include an analysis of how the pressure arose.
Public institutions must give a summary of the financial status and policy imperatives
in respect of the public institutions receiving transfers from the department. The cost
pressures must be presented, including how the public institution intends to address
these pressures within existing baselines given that there are no additional funds
available for allocation.
A review of public institutions budgets’ and spending must be implemented in order
to manage cost pressures. All expenditure items, including personnel numbers, and
the proposed spending on non-essential spending areas such as on events,
catering, travel, the use of consultants, and venues should be scrutinised.
Institutions must submit an initial budget outlook statement to the national
department to whose vote they have been designated. The budget outlook
statement should include the current status of major public entities receiving
transfers from the department, including underlying cost assumptions, performance
indicators, prevailing issues that require a solution and their expenditure trends. This
must also include how the institution is planning to manage its personnel budgets
going forward.
This information regarding the public institutions is to be considered by the
department in the preparation of its inclusive budget vote submission to the National
Treasury.
Conditional grant change proposals must be submitted when a department is
proposing changes to the structure of a conditional grant. Such changes must be
submitted to the National Treasury as part of the narrative accompanying the budget
submission by 13 July 2018. This submission should include a description and
motivation for any proposed changes to the purpose, components or implementation
model of a grant, as well as any proposed new grant that can be funded within the
department’s baseline. Before submitting such a proposal it should be discussed
with analysts in the Intergovernmental Policy and Planning unit of the National
Treasury (this unit can be contacted at [email protected]) as well as the
relevant official from the Public Finance unit.
Note that section 27(2)(c) of the Division of Revenue Act, 2018 requires that any
change to the allocation criteria for conditional grants must be agreed with the
National Treasury before provisional allocations and draft frameworks are submitted.
Section 27(2)(a) requires that all draft conditional grant frameworks and allocations
must be submitted to the National Treasury by 1 October 2018. This is necessary
even if no changes to the structure of a grant have been proposed in terms of the
process described in the paragraph above.
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2.2 DATA SUBMISSIONS
Information contained in the department’s budget explanatory narrative report in
section 2.1 above, must be supported by relevant data workbooks. These workbooks
must contain data in respect of the main requirements of a budget submission. The
following are the four workbooks:
a 2019 MTEC submission workbook for the national government department,
a 2019 Human Resource Budget Plan workbook,
a 2019 Value-for-money workbook, and
a 2019 MTEC Budget Planning Baseline Tool for each institution.
When working with the workbooks, note that: - Departments and other institutions must submit their 2019 MTEC submission
workbooks by 13 July 2018.
- No additional resources are available in aggregate for allocation in the 2019 MTEF; therefore this budget cycle will continue to focus on expenditure control within the existing budget limits.
- For estimation purposes, the 2021/22 baseline has been calculated. Non-recurrent allocations have been excluded from the 2021/22 baseline. The 2021/22 baseline aims to shift the composition of expenditure away from compensation of employees towards non-current expenditure.
In budgeting for non-personnel expenditure items within the department’s expenditure ceiling, the following projections can be utilised to inform the provisions that departments choose to make for general price increases over the 2019 MTEF period: Costing assumptions (a) Consumer Price Index
2019/20 financial year: 5.3 per cent 2020/21 financial year: 5.5 per cent 2021/22 financial year: 5.5 per cent
(b) Exchange rate – Rand/US$
2019/20 financial year: R 13.07/US$ 2020/21 financial year: R 13.55/US$ 2021/22 financial year: R 13.82/US$
Institutions must apply their discretion when using the assumptions. If the outcomes are different from the forecasted estimates, institutions will need to absorb any resultant differences within their budget baselines. It is also expected that budgets for some goods and services items, such as travel and accommodation grow below inflation. The costing assumptions are provisional estimates which will be updated during the year. There are risks to these estimates originating from the global and domestic environment.
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Details of each workbook are as follows:
2019 MTEC submission workbook for the national government
department is accessible on the National Treasury website:
http://www.treasury.gov.za/publications/guidelines/templates/2019/. It summarises the
department’s strategic proposals for budget reallocations, including key budget areas.
This workbook is compulsory with the following main data sheets:
Main adjustment proposal: No departmental input is required on this sheet as data is
drawn from the proposals completed on other sheets. Pre-selected significant
spending items are highlighted. The impact of proposed strategic budget
reallocations on the departmental baseline, by programme and main economic
classification, are also shown.
Proposal capture sheet: must be used to capture up to 6 strategic proposals for
reallocation:
Step 1: List strategic proposals, and complete the impact of these reallocations on
performance indicators and note the motivation,
Step 2: Complete the details regarding the source of funds and use thereof, for each
strategic reallocation proposal,
Step 3: Complete the impact of reallocations on infrastructure projects,
Step 4: Complete the impact of reallocations on personnel numbers, economic
classification and by significant spending items, if applicable.
Baseline reduction: Complete the baseline reduction columns for each of the years
of the 2019 MTEF period, by programme and economic classification level for
programmes and projects to be scaled down or closed. The percentage baseline
reduction required is 1.6 per cent in 2019/20; 1.5 per cent in 2020/21 and 1.4 per
cent in 2021/22. The rationale and impact of these reductions should be briefly
summarised in the comments column.
Costing of proposals: Complete detailed data in this sheet to record the costing
information related to proposals (optional).
Human Resource Budget Plan workbook provides data on how the department
manages its personnel expenditure and headcount. Completion of this workbook is
compulsory. The guidelines as referred to in section 2.1 above must be used when
costing the compensation of employees.
Value-for-money workbook departments must use the standardised sheet provided in
the workbook to record at a minimum the aggregate annual totals for the value-for-
money element. The other rows for the economic classification breakdown can also be
completed, or if preferred, supporting costing documents submitted.
2019 MTEC Budget Planning Baseline Tool for each institution must contain
2019 MTEC budget data and be submitted separately to the department and to the
National Treasury. The data template will be distributed electronically by the National
Treasury to the respective institutions. The department submitting the institutions’
budget as part of its vote must also include its own assessment of that budget as part
of the submission.
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3 SEPARATE SUBMISSIONS
3.1 LARGE STRATEGIC INFRASTRUCTURE PROJECTS
As directed by Cabinet, National Treasury is working with the Presidential Infrastructure
Coordinating Commission (PICC) Secretariat, the Departments of Planning, Monitoring
and Evaluation (DPME) and Economic Development (EDD) to establish a Budget Facility
for Infrastructure (BFI). This establishes specialised structures, procedures and criteria for
committing fiscal resources to large public infrastructure spending items.
A separate Guideline for the Preparation of Budget Submissions for Large Strategic
Infrastructure Projects must be adhered to by a department when preparing large
infrastructure proposals. All National Treasury guidelines can be found at:
http://www.treasury.gov.za/publications/guidelines/. Departments must comply with this
guideline and its requirements. The closing date for submission of large infrastructure
proposals is 31 July 2018.
Infrastructure projects with a total project cost of less than R1 billion per annum as well as
projects that do not meet the strategic infrastructure projects criteria stated in the
Guideline for the Preparation of Budget Submissions for Large Strategic Infrastructure
Projects should form part of the department’s normal budget submission in line with the
reallocation criteria described in sections 2.1 and 2.2 above. For these projects, the
Capital Planning Guidelines should be consulted. All National Treasury guidelines can be
found at: http://www.treasury.gov.za/publications/guidelines/.
The submission for the smaller projects should be included in the general budget
submission due by 13 July 2018.
3.2 GENERAL BUDGET SUPPORT FROM DEVELOPMENT COOPERATION PARTNERS
Funding of R600 million is available for the 2019 MTEF period under the General Budget
Support (GBS) component of the European Union (EU)’s funded National Development
Policy Support Programme. Only proposals from national departments in support of the
identified national priorities, and compliant with the appropriate use of official development
assistance (ODA) policies will be considered.
A separate Guideline for General Budget Support Funding must be consulted in order to
complete a Business Plan for GBS Funding template. This guideline and the template are
available on the National Treasury’s website:
http://www.treasury.gov.za/publications/other/BudgetSupportManuals/GBS2019-2020/
Proposals must be submitted to the National Treasury by 13 July 2018.
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3.3 BUDGET PROGRAMME STRUCTURE CHANGE PROPOSALS
Where a department is considering making revisions to budget programme structures and
activity descriptions, these budget programme structure changes should be discussed
with the relevant Treasury budget analyst before submitting a formal request for approval
of the change. The Budget Programmes Structure Guidelines must be consulted. All
National Treasury guidelines can be found at:
http://www.treasury.gov.za/publications/guidelines/.
Formal requests for budget programme structure changes must be submitted to the
National Treasury by 27 June 2018, together with an update to the 2018 ENE database.
On approval of the budget structure change, the National Treasury will provide the
department with an updated and customised 2019 MTEC data submission workbook to
complete. The new workbook template will be in the format of the newly approved
programme structure, in line with the updated ENE database submitted with the
application.
The department must then return the completed 2019 MTEC data submission
workbook by 13 July 2018.
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4 2019 MTEF BUDGET PROCESS
4.1 Critical 2019 MTEF National Budget Process dates
ITEM DATE
MTEF technical guidelines and 2019 MTEC submission workbooks issued to departments
June 2018
Information sessions with institutions on MTEF technical guidelines and database June 2018
Institutions submit proposals for budget programme structure revision 27 June 2018
Submission from institutions including applicable infrastructure proposal submissions
13 July 2018
Submission from institutions for large strategic infrastructure projects 31 July 2018
MINCOMBUD Technical Committee process concludes: Recommendations tabled to MINCOMBUD
September 2018
ENE technical guidelines and database distributed to institutions October 2018
Tabling of Medium Term Budget Policy Statement October 2018
Preliminary allocation letters issued to departments (2 days after MTBPS) October 2018
Submission of 2019 ENE database by departments and Public Institutions 14 November 2018
Submission of draft 2019 ENE chapter by departments (with public institutions information)
16 November 2018
Cabinet approved final allocations distributed to departments 30 November 2018
Budget tabled in Parliament February 2019
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ANNEXURE A: RESOURCE ALLOCATION PROCESS STEPS
MONTH TASK ROLE-PLAYERS FORUM/S OUTPUTS REQUIRED
June – July
Compilation of budget submissions by departments and public institutions
Formulation of recommendations to technical committees
Departments
Public institutions
National Treasury
Department of Public Service and Administration (DPSA)
Department of Planning, Monitoring and Evaluation (DPME)
Department of Cooperative Governance (DCoG)
Bilateral and technical group
interactions 2
Written and data budget submissions to function groups
End June –July
Consultation between the Executive Authority of Parliament and Minister of Finance before submission of budget by Parliament of South Africa (in line with s17(1) (b) (d) of Financial Management of Parliament and Provincial legislatures Act, 2009
Minister of Finance
Speaker of National Assembly
Chairperson of National Council of Provinces (NCOP)
Secretary of Parliament
MTEC hearings Recommendations to Minister of Finance
End July – September
Formulation of recommendations to technical and political committees
Departments
Public institutions
Function groups
Technical Committee on Finance (TCF)
MTEC
Function group interactions 3
10x10 meeting/s 4
MTEC hearings
TCF meeting/s
FOSAD
Recommendations to political committees on information to be tabled in MTBPS, need to include:
fiscal framework
key national government spending priorities
division of revenue
substantial adjustments to conditional grants
2 Technical group meetings are held, in which relevant departments, public entities and provincial structures participate. Technical groups, and the function groups that they are housed within, are aligned with particular outcomes specified in the MTSF. The technical group considers submissions by institutions and discusses the reallocation of resources within the group as a whole (including constitutional institutions).
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MONTH TASK ROLE-PLAYERS FORUM/S OUTPUTS REQUIRED
End September – October
Formulation of recommendations to Cabinet
MINCOMBUD MINCOMBUD meeting/s
Cabinet meeting/s
Approval of recommendations to be tabled in MTBPS
End October
Tabling of 2018 MTBPS
Minister of Finance
Parliament
MTBPS publication including:
fiscal framework
key national government spending priorities
division of revenue
substantial adjustments to conditional grants
End October – November
Draft allocation letters
Finalisation of details of National government allocations to be included in 2019 Budget
Function groups
MTEC
MINCOMBUD
Cabinet
MTEC hearings
FOSAD
MINCOMBUD meeting/s
Cabinet meetings
Final national government allocation letters
December – February
Finalisation of recommendations to be tabled in 2019 Budget
Drafting of budget documentation
MTEC
MINCOMBUD
Cabinet
National departments and public institutions
MTEC hearings
FOSAD
MINCOMBUD meeting/s
Cabinet meetings
Budget review publication
Appropriation bill
Division of revenue bill
Estimates of national expenditure publications
People’s guide to the budget
Tax proposals
February Tabling of budget Minister of Finance
Parliament
Budget tabled
March – July
Adoption of budget expenditure legislation
National Assembly
National Council of Provinces
Hearings
Debates
Adoption of bills
Budget adopted
3 Function group hearings are DG’s hearings on budget policy or other meetings involving senior officials from relevant institutions and experts from the relevant field. In this setting, several technical groups may be brought together to consider submissions by institutions and discuss the allocation of resources across the function as a whole. Function groups may also be called to present at MINCOMBUD technical meeting hearings. 4 In function areas with a large degree of concurrent powers, a 10x10 meeting, comprised of the heads of the nine provincial departments and one national lead department in the function together with their finance counterparts, may be convened as a substitute or complement for the work of the function group.
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ANNEXURE B: BUDGET PROCESS TECHNICAL AND POLITICAL STRUCTURES
TECHNICAL STRUCTURES
1. The senior technical structures of the MTEF budget process are the Minister’s
Committee on the Budget Technical Committee (MTEC) and the Technical Committee
on Finance (TCF):
MINCOMBUD Technical Committee (MTEC) is a committee of senior officials from
National Treasury (NT), Department of Planning, Monitoring and Evaluation (DPME),
Department of Cooperative Governance (DCoG) and Department of Public Service
and Administration (DPSA) that makes recommendations to Ministers’ Committee on
the Budget (MINCOMBUD) regarding budget allocations in the medium term
expenditure framework, taking into account government priorities, funding available,
alternative funding sources and the division of revenue amongst the three spheres of
government.
TCF is a committee of the heads of all provincial treasuries and is chaired by the
Deputy Director-General (DDG) of the Intergovernmental Relations division of the
National Treasury. The TCF considers intergovernmental finances and the Division of
Revenue and makes recommendations to the Budget Council, Budget Forum and
MTEC.
2. The process of generating final recommendations to the MTEC includes the following
elements:
National Treasury appoints a coordinator for each technical group, who will be
responsible for engaging with budget departments and preparing reports to the
MTEC for each technical group.
Budget bilaterals are convened between National Treasury and senior finance and
programme officials in each department.
Technical group meetings are held, in which relevant departments, institutions and
provincial structures participate. Technical groups, and the function groups within
which they are housed, are both aligned with particular outcomes specified in the
MTSF. The technical group considers submissions by departments and discusses
the reallocation of resources within the group as a whole. Financial analysis
discussions are also held with selected institutions.
In function areas with a large degree of concurrent powers, a function 10x10,
composed of heads of department of the nine provincial and the national lead
department in the function, together with their finance counterparts, may be
convened as a substitute or complement for the work of the technical group. Where
resource allocation decisions are recommended that alter the division of revenue
across the three spheres of government, a function 10x10 will be required.
Performance dialogues, convened by the DPME together with the departmental,
technical group or functional stakeholders may be held.
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MTEC may also convene function group hearings, DG’s budget forums on budget
policy or other meetings involving senior officials from relevant departments and
experts in the relevant field. In this setting, several technical groups may be brought
together to consider submissions by departments and discuss the allocation of
resources across the function as a whole.
3. Technical group coordinators will prepare a final report on the budget proposals
recommended as an outcome of the process. These reports will be presented to MTEC,
which will make final recommendations to MINCOMBUD and then to Cabinet.
POLITICAL STRUCTURES
The Ministers’ Committee on the Budget
4. MINCOMBUD has been constituted as a Committee of Cabinet, chaired by the Minister
of Finance. Its members are appointed by the President on recommendation from the
Minister of Finance. MINCOMBUD may invite other members of Cabinet or senior
officials to attend and/or present on issues of relevance to its mandate. In addition to
political office bearers, MINCOMBUD meetings are attended by the Directors-General of
National Treasury, the Presidency, and the Departments of Planning, Monitoring and
Evaluation and Cooperative Governance. Senior officials of National Treasury attend as
determined by the Director General: National Treasury. The Director-General: National
Treasury ensures that the National Treasury provides administrative services for the
proper functioning of MINCOMBUD.
5. The functions of MINCOMBUD are to:
Consider and advise Cabinet on budget allocations to be included in the national
budget, MTEF and the division of revenue framework.
Consider matters related to the determination of expenditure allocations, including
the economic assumptions underpinning the budget, fiscal policy objectives and tax
proposals.
Recommend, in terms of section 30(2)(b) of the PFMA, items of unforeseeable and
unavoidable expenditure to be included by the Minister of Finance in the national
adjustments budget. When performing this function, the President and the Deputy
President chair MINCOMBUD, and constitute the “(MINCOMBUD)/Treasury
Committee”.
Budget Council and Budget Forum
6. The Intergovernmental Fiscal Relations Act (97 of 1997) establishes a Budget Council
consisting of the Minister of Finance and the Members of the Executive Council of
Finance (MEC for Finance) of each province. The Chairperson of the Financial and
Fiscal Commission may also attend the Budget Council. The Minister of Finance is the
chairperson of the Budget Council.
7. The Act defines the Budget Council as a body in which the national government and the
provincial governments consult on any fiscal, budgetary or financial matter affecting the
provincial sphere of government.
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8. The Intergovernmental Fiscal Relations Act (97 of 1997) establishes a Local
Government Budget Forum comprising of the Minister of Finance (who is the
chairperson), the MEC for Finance of each province and five representatives of the
South African Local Government Association (SALGA) at national level, as well as one
representative of SALGA from each province. The Act defines the Budget Forum as a
body in which the national government, the provincial governments and organised local
government consult on any fiscal, budgetary or financial matter affecting the local
sphere of government.
Joint MINMECs
9. From time to time, the Minister of Finance in consultation with the Cabinet member
responsible for another portfolio may convene a Joint MINMEC to consider sector
budget issues and make recommendations to MINCOMBUD. A Joint MINMEC is
comprised of the Minister of Finance, Members of the Executive Council of Finance from
nine provinces and their counterparts at the national and provincial level from the
relevant sector department.
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ANNEXURE C: FUNCTION GROUPS
FUNCTION GROUP TECHNICAL GROUP (FUNCTION SUB-GROUP)
KEY DEPARTMENTS AND OTHER INSTITUTIONS1
1. Learning and
culture
Basic education Basic Education, Provincial Education departments
Post-school education and training
Higher Education and Training, Sector Education and Training Authorities, National Skills Fund, National Student Financial Aid Scheme, Quality Council for Trades and Occupations, Council for Higher Education, South African Qualifications Authority
Arts, culture, sport and recreation
Sports and Recreation, Arts and Culture, Provincial and Local Arts, Culture, Sport and Recreation
2. Health Health Health, Provincial Health departments, National Health Laboratory Service
3. Social
development
Social protection Social Development, South African Social Security Agency, Provincial Social Developments
Social security funds Road Accident Fund, Unemployment Insurance Fund, Compensation Fund
4. Community
development
Community development Cooperative Governance (limited to conditional grant and urban development programmes), Human Settlements, Water and Sanitation (water services), Public Transport, Energy, Provincial Human Settlements, Provincial Public Transport Local Governments
5. Economic
development
Industrialisation and exports
Trade and Industry, Economic Development, Mineral Resources, Tourism, Small Business Development, Public Works
Agriculture and rural development
Agriculture Forestry and Fisheries, Rural Development and Land Reform
Job creation and labour affairs
Labour, Public Works, Expanded Public Works Programmes, Cooperative Governance
Economic regulation and infrastructure
Energy, Transport, Environmental Affairs (environmental regulation), Telecommunications, Water and Sanitation (water services), Provincial (Roads only) and Local Governments
Innovation, science and technology
Science and Technology
6. Peace and
security
Defence and state security
Defence, Military Veterans, Financial Intelligence Centre, State Security, Armscor and the Castle Control Board
Police services Police, Independent Police Investigative Directorate, Civilian Secretariat for Police
Law courts and prisons Justice and Constitutional Development, Correctional Services, Office of the Chief Justice, Legal Aid South Africa, Public Protector of South Africa, South African Human Rights Commission
Home affairs Home Affairs
Health Military Health Services
7. General public
services
Executive and legislative organs
Presidency, Communications, Women, Parliament, Provincial Legislatures, Planning, Monitoring and Evaluation
Public administration and fiscal affairs
Public service and Administration, National Treasury, Public Enterprises, Statistics South Africa, Cooperative Governance and Traditional Affairs, Public Works
External affairs International Relations and Cooperation, National Treasury
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2019MTEF
MEDIUM TERM EXPENDITURE FRAMEWORK
TECHNICAL GUIDELINES
NATIONAL
Private Bag X115, Pretoria, 0001 | 40 Church Square, Pretoria, 0002
Tel +27 12 315 5944 | Fax +27 12 406 9055
Web: www.treasury.gov.za
